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Japan will postpone a $200 million debt payment under the DSSI

ISLAMABAD: Under the second phase of the G20 Loan Service Suspension Initiative, Japan agreed to suspend payment of a $200 million debt, providing much-needed assistance to Pakistan (DSSI).

Under the same strategy, the first agreement between two nations to postpone a debt of around $370 million was struck on April 27, 2021. The overall amount of delayed debt has risen to $570 million, allowing Pakistan’s government to re-establish fiscal space in order to recover from the Covid-19 epidemic.

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These concessional loans have favorable conditions in terms of low interest rate, as well as long grace and repayment period. Under the second agreement, repayments for the debt and interest due between January 1 and June 30, 2021 would be rescheduled after December 15, 2022.

In addition to the debt deferral, Japan has also extended a total of $23.5 million in grants to Pakistan for supplementing its counter-Covid-19 measures.

The steps include delivery of diagnostic kits in February 2020, disbursement of a total of $7.41 million to UNICEF, IOM, IFRC, UNHCR, and UNOPS for providing hygiene items and alternative learning opportunities, and training health workers, etc in April-May period of 2020.

In December 2020, Japan also extended a Grant Assistance of $9.5 million to NDMA (National Disaster Management Authority) for procuring medical equipment, and in March 2021, another $6.59 million were extended to UNICEF by Japan for improving the vaccine cold-chain.

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Matsuda Kuninori, Japan’s Ambassador to Pakistan, said, “I am aware that Pakistan’s Covid-19-affected economy is on a solid recovery path, including the prospect of higher GDP growth”. “Next year, Japan and Pakistan are going to celebrate the 70th anniversary of the establishment of diplomatic relations and I strongly hope that a new chapter will be carved in the history of our friendship on the basis of Japan’s development cooperation in the past decades” Kuninori added.




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